国际财务管理课件

国际财务管理课件第1页/共31页2ObjectivesThischapterprovidesafoundationforunderstanding

howexchangeratesaredetermined,alsoidentifiesanddiscussesthevariousinternationalfinancialmarkets

usedbyMNCs.Thespecificobjectivesare:

*toexplainhowtheequilibriumexchangerateisdetermined;*toexaminefactorsthataffecttheequilibriumexchangerate;and*todescribethebackgroundandcorporateuseoftheinternationalfinancialmarkets.第2页/共31页3DeterminationofEquilibriumExchangeRateAnexchangeratemeasuresthevalueofonecurrencyinunitsofanothercurrency.Whenacurrencydeclinesinvalue,itissaidtodepreciate.Whenitincreasesinvalue,itissaidtoappreciate.Thepercentagechangeinthevalueofaforeigncurrencyiscomputedas(St

–St-1)/St-1(whereStdenotesthespotrateattimet.)第3页/共31页4DeterminationofEquilibriumExchangeRateAnexchangeraterepresentsthepriceofacurrency,whichisdeterminedbythedemandforthatcurrencyrelativetothesupplyofthatcurrency.Theequilibriumexchangerateisthepointwherethedemandforonecurrencyequatesthesupplyofthatcurrency.Theequilibriumexchangeratewillchangeovertime.第4页/共31页5FactorsthatInfluence

ExchangeRatesRelativeInflationRatesRelativeInterestRatesItisusefultoconsiderrealinterestratesRelativeIncomeLevelsGovernmentControls*foreignexchangebarriers;*foreigntradebarriers;*interveningintheforeignexchangemarket;*affectingmacrovariables.第5页/共31页6FactorsthatInfluence

ExchangeRatesExpectations*Foreignexchangemarketsreacttoanynewsthatmayhaveafutureeffect.*Institutionalinvestorsoftentakeacurrencypositionsbasedonanticipatedinterestratemovementsinvariouscountries.*Becauseofspeculativetransactions,foreignexchangeratescanbeveryvolatile.第6页/共31页7FactorsthatInfluence

ExchangeRatesInteractionofFactors*Trade–relatedfactors(inflationdifferential,

incomedifferentialandgovernment’straderestrictions)andfinancialfactors(interestratedifferential,capitalflowrestriction)sometimesinteract.Exchangeratemovementsmaybesimultaneouslyaffectedbythesefactors.*Overaparticularperiod,differentfactorsmayplaceopposingpressuresonthevalueofaforeigncurrency.第7页/共31页8FactorsthatInfluence

ExchangeRatesThesensitivityoftheexchangeratetothesefactorsisdependentonthevolumeofinternationaltransactionsbetweenthetwocountries.Summaryofhowfactorscanaffectexchangerates:Exhibit2.1.第8页/共31页9InflationDifferentialIncomeDifferential

Gov’tTradeRestrictionsU.S.DemandforForeignGoodsForeignDemandforU.S.GoodsU.SDemandfortheForeignCurrencySupplyoftheForeignCurrencyforsaleInterestRateDifferentialCapitalFlowRestrictionsU.S.DemandforForeignSecuritiesForeignDemandforU.S.SecuritiesU.S.DemandfortheForeignCurrencySupplyoftheForeignCurrencyforSaleExchangeRateBetweentheForeignCurrencyandtheDollarTrade-RelatedFactorsFinancialFactorsExhibit2.1SummaryofHowFactorsCanAffectExchangeRates第9页/共31页10QuestionsandApplicationsAssumethattheUnitedStatesInvestsheavilyingovernmentandcorporatesecuritiesofCountryK.Inaddition,residentsofCountryKinvestheavilyintheUnitedStates.Approximately$10billionworthofinvestmenttransactionsoccurbetweenthesetwocountrieseachyear.Thetotaldollarvalueoftradetransactionsperyearisabout$8million.Thisinformationisexpectedtoalsoholdinthefuture.第10页/共31页11QuestionsandApplications

BecauseyourfirmexportsgoodstoCountryK,yourjobasinternationalcashmanagerrequiresyoutoforecastthevalueofcountryK’scurrency(the“krank)withrespecttothedollar.Explainhoweachofthefollowingconditionswillaffectthevalueofthekrank,holdingotherthingsequal.Then,aggregatealloftheseimpactstodevelopanoverallforecastofthekrank’smovementsagainstthedollar.第11页/共31页12

QuestionsandApplications

a.U.S.Inflationhassuddenlyincreasedsubstantially,whileCountryK’sInflationremainslow.b.U.S.interestrateshaveincreasedsubstantially,whileCountryK’sinterestratesremainslow.Investorsofbothcountriesareattractedtohighinterestrates.第12页/共31页13QuestionsandApplications

c.TheU.S.Incomelevelhasincreasedsubstantially,whileCountryK’sincomelevelhasremainedunchanged.d.TheUnitedStatesisexpectedtoimposeasmalltariffongoodsimportedfromCountryk.e.Combineallexpectedimpacttodevelopanoverallforecast.第13页/共31页14InternationalFinancialMarkets

Topicsforclassdiscussion:1.Whereistheforeignexchangemarket?2.Whydoesaforeignexchangemarketexist?3.Whichinternationalfinancialmarketsaremostimportanttoafirmthatconsistentlyneedsshort-termfunds?Whataboutafirmthatneedslong-termfunds?第14页/共31页15ForeignExchangeMarketTheforeignexchangemarketallowscurrenciestobeexchangedinordertofacilitateinternationaltradeorfinancialtransactions.Thesystemforestablishingexchangerates

hasevolvedovertime:

*goldstandard;*periodofinstability;*BrettonWoodsAgreement;

*SmithsonianAgreement;

*floatingexchangeratesystem.第15页/共31页16ForeignExchangeMarketForeignExchangeTransactions*spotmarket&forwardmarket(readtherelatedmaterialsaboutthosemarkets);*bid/askspreadofbanks;(examples)*foreignexchangequotations

directquotations(numberoflocalcurrencyperforeigncurrency)indirectquotationscrossexchangerate(howtocompute)*Currencyfutures&optionsmarkets第16页/共31页17EurocurrencyMarketU.S.dollardepositsplacedinbanksinEuropeandothercontinentsarecalledEurodollars.Inthe1960sand70s,theEurodollarmarket,orwhatisnowreferredtoasthe

Eurocurrencymarket,grewtoaccommodateincreasinginternationalbusinessandtobypassstricterU.S.regulationsonbanksintheU.S.第17页/共31页18EurocurrencyMarketTheEurocurrencymarketismadeupofseverallargebankscalledEurobanksthatacceptdepositsandprovideloansinvariouscurrencies.AlthoughtheEurocurrencymarketfocusesonlarge-volumetransactions,therearetimeswhennosinglebankiswillingtolendtheneededamount.AsyndicateofEurobanksmaythenbecomposedtounderwritetheloans.第18页/共31页19EurocurrencyMarketTheEurocurrencymarketinAsiaissometimesreferredtoseparatelyastheAsiandollarmarket.*TheprimaryfunctionofbanksintheAsiandollarmarketistochannelfundsfromdepositorstoborrowers.*Anotherfunctionisinterbanklendingandborrowing.第19页/共31页20EurocreditMarketLoansofoneyearorlongerareextendedbyEurobankstoMNCsorgovernmentagenciesintheEurocreditmarket.TheseloansareknownasEurocreditloans.Floatingratesarecommonlyused,sincethebank’sassetsandliabilitymaturitiesmaynotmatch.第20页/共31页21EurobondMarketTherearetwotypesofinternationalbonds.*Bondsdenominatedinthecurrencyofthecountrywheretheyareplacedbutissuedbyborrowersforeigntothecountryarecalledforeignbondsorparallelbonds.*BondsthataresoldincountriesotherthanthecountryrepresentedbythecurrencydenominatingthemarecalledEurobonds.第21页/共31页22EurobondMarketEurobondsareunderwrittenbyamultinationalsyndicateofinvestmentbanksandsimultaneouslyplacedinmanycountries.Eurobondsareusuallyissuedinbearerform,payannualcoupons,maybeconvertible,mayhavevariablerates,andtypicallyhavefewprotectivecovenants.第22页/共31页23InternationalStockMarketsInadditiontoissuingstocklocally,MNCscanalsoobtainfundsbyissuingstockininternationalmarkets.Thiswillenhancethefirm’simageandnamerecognition,anddiversifytheshareholderbase.Thestocksmayalsobemoreeasilydigested.StockissuedintheU.S.bynon-U.S.firmsorgovernmentsarecalledYankeestockofferings.Non-U.S.Firmsmayalsoissue

Americandepositoryreceipts(ADRs),whicharecertificatesrepresentingbundlesofstock.ADRsarelessstrictlyregulated.第23页/共31页24InternationalStockMarketsElectroniccommunicationsnetworks(ECNs)havebeencreatedtomatchordersbetweenbuyersandsellersinrecentyears.AsECNsbecomemorepopularovertime,theymayultimatelybemergedwithoneanotherorwithotherexchangestocreateasingleglobalstockexchange.第24页/共31页25ComparisonofInternationalFinancialMarketsTheforeigncashflowmovementsofatypicalMNCcanbeclassifiedintofourcorporatefunctions:foreigntrade;directforeigninvestment;short-terminvestmentorfinancing;longer-termfinancing.Allofwhichgenerallyrequiretheuseoftheforeignexchangemarkets.*Foreigntrade.Exportsgenerateforeigncashinflowswhileimportsrequirecashoutflows.第25页/共31页26ComparisonofInternationalFinancialMarketsDirectforeigninvestment(DFI).

Cashoutflowstoacquireforeignassetsbutgeneratefutureinflows.Short-terminvestmentorfinancing

inforeignsecurities,usuallyin

Eurocurrencymarket.*Longer-termfinancing

inthe

Eurocredit,

Eurobond,orinternationalstockmarkets.第26页/共31页27SummaryoftheCorporateUseofInternationalFinancialMarketsMNCscanusespotmarkettoexchangecurrenciesforimmediatedelivery;forwardmarketorcurrencyfuturesmarkettolockintheexchangerateatwhichcurrencieswillbeexchangedatafuturepointintime;第27页/共31页28SummaryoftheCorporateUseofInternationalFinancialMarketscurrencyoptionsmarkettolockinthemaximum(minimum)amounttobepaid(received)inafuturecurrencytransactio